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Employment & Labour

Custodial punishment still a reality in industrial relations

Arthur Zeilikman

By Arthur Zeilikman

In a recent decision of the Ontario Court of Justice, a Justice of the Peace sentenced a director to heavy fines and 90 days behind bars for failure to pay wages.

The decision deals with Steven Blondin, a director of six Ontario companies.  Between February 2008 and April 2010, Blondin and his companies received 113 orders of the Ministry of Labour issued by an employment standards officer. These orders demanded that Blondin and the companies pay over $125,000 in unpaid wages to 61 employees.

Over the course of approximately two years, Blondin and the companies refused to comply with all of the orders. Blondin’s dismissive conduct resulted in prosecution, ultimately causing the director and each company to enter a plea of guilty wherein admissions were made with respect to violating the Employment Standards Act, 2000, and failing to comply with the employment standards officer’s orders.

The plea resulted in fines totaling $280,000, an order to pay the outstanding wages with a 25 per cent victim fine surcharge under the Provincial Offences Act and, most importantly, an imposition of a 90-day imprisonment term for Blondin.

With respect, while Blondin’s conduct was clearly intolerable, incarceration should not have been imposed. Instead, monetary damages, whether in the form of judgment in the normal course of a lawsuit or the imposition of a regulatory fine, would have sufficed.

We need to remember that it was not too long ago that employment and criminal law used to overlap quite significantly. Under the old Master and Servant Act, 1847 – the governing legislation in nineteenth century Ontario dealing with “employment” relations - workers who refused to follow their employer’s directives could actually face criminal prosecution and imprisonment.

Appropriately for the time, employers enjoyed a conspicuous contrast in terms of their rights: if a worker’s complaint against the employer was legitimate, the worker would no longer be bound by the terms of the contract and the employer would face only a fine. The imbalance of power was palpable: a worker’s breach of the contract of service could amount to a loss of liberty; an employer’s breach of the same contract would too attract loss but only of a pecuniary kind. And yet, over the decades, Canadian society wisely decided to move the resolution of employment disputes to the civil litigation realm.

Having regard to Blondin’s case, it makes little sense to impose penal sanctions only because the employer is traditionally held to be in a position of power vis-à-vis the vulnerable employee when the dispute is, in essence, a contractual one. There is a reason why we have decided to mostly forgo the imposition of punitive measures in commercial and industrial contexts. Further, things should be put in perspective: the amount the director owed in wages was $125,000 spread over 61 employees – roughly $2,000 per person. The amount recoverable in a small claims court is $25,000 per plaintiff.

In short, although the nuances of the decision remain unclear (the decision is yet to be posted and the only information available is in the form of a brief summary on the Ministry of Labour website), on the facts available, Blondin’s conduct did not warrant the deprivation of his liberty.

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